Communities and Economic Development

Intrinsically I think we understand the value a community can bring to its own members. Can certain communities also create value to the greater region in which they reside?

Here in Austin, Texas, the Door64 community creates value for its members. However, while growing this community, I realized it also substantially benefits our city and state from an economic development perspective. Economic development is often concerned with employment, local retention, and entrepreneurial growth; the Door64 community happens to address all three:

  • Employment: Networking is arguably one of the best methods to navigate ones career, and even gain some semblance of security in uncertain times. Communities naturally help people of like background or interest congregate, and in the case of Door64, we attract professionals of similar high-tech expertise & employment backgrounds. Providing opportunities for networking within the community allows predictably unpredictable introductions and interactions to occur, yielding new career opportunities for engaged members.

  • Local Retention: When individuals are isolated or without connections in the geographic area where they reside, they may feel unattached to it. However, as members of a community interact with other members, personal connections are developed. In the Door64 community, because we are focused on Central Texas, the vast majority of our membership is geographically concentrated. Most online connections fostered are local, and thus over time growing the network enables members to feel more tied to our area. When considering relocation, realizing there is a professional network to be left behind is a compelling reason to stay.

  • Entrepreneurial Growth: Since communities often bring together people of like backgrounds, interests, or expertise, there is potential for organic collaboration. Moreover, when a community possesses a significant local presence, there is greater likelihood that members will meet in person and talk shop about their common interests and ideas. This kind of interaction is conducive to entrepreneurship. With the Door64 community, in the past couple months I observed a group of technology professionals form spontaneously who were (a) unemployed, and (b) interested in doing something productive while not hitting the job search. Nicknamed the “Door64 Start-up Gang”, they decided to see how their various talents could be used together to create a product or service and generate some income.

As a community leader, understanding this value external to the community allows you to position it to make a greater impact where the members reside. Within geographic regions, encouraging and fostering communities that aggregate people of similar backgrounds (especially from an employment perspective) can uniquely and creatively address local economic development initiatives.

What’s so difficult about building an online community?

Imagine you are in the market for a new car.

Under normal circumstances, you arrive at the dealership, and browse a few models until you settle on the one with all the features you desire. You negotiate with the salesman, end up buying it, and drive off the lot. All the features, from the power windows, brakes, radio, etc. work as expected, and you’re happy with your investment as you cruise in your new wheels.

You have entered the Twilight Zone

Now, imagine a different set of experiences. Rewind the story back to the dealership. Once settling on the car possessing all the features you desire, you negotiate with the salesman. Before settling on a price, the salesman warns you that once purchased, all the car’s wonderful features that you fell in love with will only function if 1000 other individuals also buy this same model car. Otherwise, your new car won’t even drive off the lot.

Ready to sign on the dotted line? My guess is you’ll likely hesitate since the fulfillment of your investment relies upon many other people buying the same vehicle. That is the catch-22 of building online community: It does not work if no one else participates, and most people refuse to participate if it’s not already working.

Making things worse, there are hundreds of other car dealers in the area, and once the customer walks out the door, he’s probably not coming back, even if enough people magically purchase the threshold quantity to make the vehicle work. There’s just too much competition for the customer’s attention.

A challenge of community building is providing value and attracting the right new members while in the fledgling state. Perhaps more art than science, the initial work of the community leader is to create value in the very beginning – value that need not require a mature community to even exist yet. That value exchange is not cast in stone, and as the community grows, the methods use to create value may need change.

Community Value: Perceived Value

Why does someone decide to join a community?

I tackled this question in part via my previous post about the threshold of participation. Recall my statement that a community’s perceived value to an individual must be greater than the obstacles that deter that person from joining:

Perceived Value > Threshold of Participation

What is perceived value? It is the projected personal benefit that would be realized by joining and engaging in the community. Sounds rather selfish, doesn’t it? Some readers might respond, “Surely not everyone joins communities because of what’s in it for them.” Sure they do.

Self-serving

It is easy for any of us to state publicly that our participation in any community to which we belong is a selfless effort to achieve a vision or to generally promote the betterment of mankind (especially, but not exclusively for caused-based organizations). However, privately, in the corner of our conscious mind where decisions are weighed and made, each person eventually justifies involvement based on how it will positively affect him or her. Examples of such personal benefits are:

  • Intrinsic: Direct or indirect impact to the person’s own life for the better.
  • Association: The feeling of belonging to and participating in an entity bigger than oneself.
  • Satisfaction: Feeling a sense of self-worth and accomplishment by seeing a problem solved and a vision achieved.

If the individual can envision enough of these benefits…enough perceived value to outweigh the threshold to participation, then he/she joins the community.

It’s all about perception

Notice that I was careful to say, “perceived value”, which is a forecast of future value. After all, how can a prospective member realize any value without first engaging in the community?

Perception of any future value can be communicated from various sources. Some sources are direct, such as observing the community interactions and benefits first hand. For communities that operate publicly so outsiders can at least view some activity within, or offer a trial period, this observation is possible. Alternately, examples of indirect sources of perceived value are personal referrals/word-of-mouth or the media (blogs, TV, radio, etc.)

The key point question is: Does your community provide enough sources to perceive value, enough to incentivize the right prospective members to overcome the threshold to join? For example, in my online community, I display a special front page for non-members that says:

  • Who we are and what we do (Benefits: association, intrinsic),
  • Links to testimonials and media coverage (indirect sources),

…and of course, a link to register. This communicates and validates assumptions of perceived value. I want to make it as easy as possible for people to realize and justify the value, make the decision to join right there.

That’s growth.